Capitol Hill Report: "Doc Fix" on the Docket

February 18, 2011

FY 2012 Budget Talks Begin Before FY 2011 Even Set

President Obama released the Administration's 2012 budget last week and House Republican majority immediately criticized it for not cutting enough from the federal deficit. The budget generates a lot of media but it is somewhat meaningless as it is merely a proposal for where to allocate federal funds for the upcoming year. The budget doesn't actually do the spending. Those decisions are made later in the Appropriations Committees on both sides of the Capitol. If Congress cannot agree on a budget, it just doesn't have one, which is what happened for the 2011 budget. But the budgets do set the table for some key issues. First up for physicians is the flawed Sustainable Growth Rate (SGR) formula that calls for a 25 percent cut in physician reimbursement under Medicare on January 1, 2012.

"Doc Fix" in President's Budget

President Obama's budget includes $62 billion in health care savings that would pay for approximately two years of a Medicare SGR fix. However, the budget does NOT specify offsets for the $315.4 billion cost of a "doc fix" beyond 2013. The $62 billion in savings comes from several tweaks to spending—the largest of which are $18.4 billion in savings from a reduction in Medicaid provider taxes. Another $12.9 billion comes from the pharmaceutical industry by including a shorter exclusivity period for follow-on biologics and provisions to end so-called "pay-for-delay" arrangements where generic brands delay introduction in exchange for payments.

By only paying for two years of a ten-year fix, my guess is the proposal is really a two-year fix. From recent history that might be a pretty good result for the physician community, especially noting that there were six temporary fixes before Congress settled on a one-year fix that postponed the cut until 2012.

But is fixing it for only two years just a gimmick? A February 15 Wall Street Journal article points out that "pay-for-delay" legislation failed to advance in a Democrat-dominated Congress last year. It also questioned where the savings comes from as the Administration's budget estimate of nearly $8.8 billion in savings from "pay-for-delay" legislation is more than triple the $2.7 billion in savings estimated by Congressional Budget Office.

It would be nice to get the SGR fix done early, but I'm not sure it will be done in the FY 2012 budget process. This, of course, remains the Academy's top priority.

NIH Budget

The President's proposed budget also includes more than $32 billion for the National Institutes of Health, more than $1 billion over 2011. The Academy was fortunate and thankful to be invited to a meeting on February 14 with NIH Director Francis Collins, MD, where he discussed the proposed budget. The Academy has long been a supporter of funding for the NIH and has frequently brought this support to the Hill in its advocacy efforts. Collins was very upbeat about the NIH receiving an increase in the President's budget at a time when so many other agencies are experiencing cuts. Collins lamented that the NIH is not able to fund nearly as many researchers as in the past, but that the NIH is well-positioned to continue as the world's leading health research institution.

At the same time, House Republicans debated cuts across all federal agencies as the House debated an FY 2011 funding bill. The Academy sent out an action alert asking that Congress spare the NIH and I hope you were able to send a message to your House member.

The Making Investments Now for Dementia (MIND) Act

One of the issues the Academy will be bringing to Capitol Hill for Neurology on the Hill is the bipartisan Making Investments Now for Dementia (MIND) Act, HR 610, by Rep. Michael Burgess, MD (R-TX). The bill is co-sponsored by Reps. Chris Smith (R-NJ) and Ed Markey (D-MA).

The MIND Act aims to provide an additional avenue for research funding by establishing issuances of United States Alzheimer's Bonds. The revenues generated by the sale of the bonds would fund the program and be directed to the NIH solely for Alzheimer's research.

Congressman Burgess included a quote from AAN President Robert C. Griggs, MD, FAAN, in his press release: "Neurologists are on the front lines in providing care for the more than five million Americans living with the devastating effects of Alzheimer's disease and providing counsel to their families and caregivers," said Robert C. Griggs, MD, FAAN, president of the American Academy of Neurology. "It is essential that Congress think in innovative ways, as suggested in the MIND Act, to encourage research into the prevention, treatment and cures of neurologic disorders like Alzheimer s disease."

More than 130 Academy members will be on Capitol Hill on March 1 asking their members of Congress to cosponsor the MIND Act (as well as the SGR fix and several other issues)

Being on the Right Committee

Like many organizations, the House and Senate divide their responsibilities into committees. In Congress, which committees you belong to can make a big difference on what issues you can push. It can also make a difference of whether you win your next election.

I have been friends with Rep. Erik Paulsen (R-MN) for a number of years. After he was first elected to Congress in 2008, I hosted a meet and greet for him and invited more than 20 medical specialties whose Washington lobbyists could come and get to know him. Only a few showed up.

Last week I hosted another meet and greet for Paulsen and invited the same groups. This time the room was packed! What happened? In Paulsen's first term he was assigned to the Financial Services Committee. This year Paulsen was named to the House Ways & Means Committee, where health care is one of its responsibilities.

As you might expect, these meet and greets often turn into fundraising opportunities later as each of the medical specialties present has a significant political action committee, just as the AAN does. (If you are a US AAN member go to www.BrainPAC.org for more information). Being a member of Congress is an honor, but being on the right committee can help keep you there.